Loyalty programmes are having to be nimble and evolve all the time, as the needs and desires of their customers change at a similar pace. Richard Holmes takes a look at some of the more recent developments in the corporate travel space, and details what to look out for in the airline, hotel and car rental spaces.
Loyalty programmes have come a long way since American Airlines launched the first airline offering back in 1981. When AAdvantage cards arrived in the wallets of America’s frequent flyers, the notion of rewarding repeat business with flights and perks changed the face of how and why we book our travel.
It didn’t take long for the innovative concept to spread to other corners of the travel industry, and today travel wallets bulge with loyalty cards for everything from airlines to hotels to bespoke concierge programmes.
While swaying our purchasing decisions with the offer of free travel and value-added perks remains the backbone of the loyalty concept, the new century has notably seen an increased focus on data. That’s data about you as a traveller – your likes and dislikes, seating preferences and travel trends, meal options and spending patterns.
“Personal data has changed the way loyalty is offered to the customer and is probably the single most influential factor in the way loyalty operates in 2015,” says Danny Bryer, Sales, Marketing and Revenue Director for Protea Hotels. “It has had an enormous impact on customer interaction and therefore on loyalty.”
While it’s easy to see this as a commercial version of Big Brother looking over your shoulder – and into your wallet – the data-mining that goes on behind the scenes is also proving to be beneficial to travellers.
By understanding your preferences, travel providers can offer you a better, more personalised, service. Of course there’s a commercial imperative behind it, but at the end of the day it’s set to improve your travel experience.
“There seems to have been a polarization in recent times between those who are points junkies and those who are increasingly finding it difficult for loyalty programmes to work for them, either because the benefits are too slow to accumulate to be worth much, or because there are hidden extras to pay, such as airline taxes,” adds Stephen Banks, Director of Sales & Marketing – Africa for Mövenpick Hotels and Resorts. “Some of the best innovations have been from loyalty programmes that allow the member to store their preferences and then have these effectively delivered when at the hotel.”
Whether you prioritise the points or the experience, one thing’s for sure: loyalty programmes are here to stay. While the airline industry, in particular, is undergoing drastic changes to the way it rewards regular customers, that evolution is inevitable in order to survive and thrive says Bryer.
“Loyalty programmes will remain a key purchasing factor as long as companies continue to evolve their loyalty offerings to suit the next generation of customer,” he says.
Airlines
Since the earliest days of airline loyalty programmes, the concept has been fairly straightforward: travellers earn points in proportion to the distance flown. The hard cost of the ticket has, by and large, borne little relation to the miles earned. The upshot? A traveller on a high-cost flexible ticket bought hours before take-off will earn just as many points as the traveller seated across the armrest who purchased a cut-price fare six months ago.
Your rung on the loyalty status ladder may add an earnings bonus to the miles you accrue, but all things being equal, passengers seated alongside one another will earn the same number of miles for the flight, regardless of what they’ve paid for their ticket.
But not for much longer.
In the biggest shake-up of airline loyalty schemes in the past decade, a number of major global and African carriers are doing an about-turn on how miles are earned. Perhaps stealing a page from budget travellers, airlines are now linking rewards to revenue. No longer will your miles be earned according to the distance between point A and B, but rather how much you – or your corporate travel manager – forked out for the ticket.
Most relevant to the African corporate traveller is the revamped Voyager programme from South African Airways (SAA).
With effect from 1 February 2015, Voyager members booking flights operated by SAA started earning miles based on the ticket price – including the controversial fuel levy – rather than the distance travelled.
For every R1,60 ($0,14) spent on a ticket, one Voyager mile will be earned. Tickets purchased in a foreign currency will first be converted into a Rand value for the mileage calculation. As with the previous mileage-based structure, Silver, Gold, Platinum and Lifetime Platinum members will earn bonus miles based on their status on the day of departure, but the airline says that even Voyager Blue members can expect a minimum of five percent return on spend. The airline will also no longer apply a minimum or maximum number of miles that can be earned when travelling on flights operated by SAA. Redemption will be by way of ‘Dynamic Awards’, and mileage credit can be spent on both the base fare and applicable fuel levy.
“The primary benchmark against which our changes were made was a direct response to our customers’ needs,” says Suretha Cruse, SAA Executive Customer Loyalty. “Members wanted to be rewarded for their loyalty based on revenue instead of distance travelled. Members also demanded more redemption options without restrictions and clear transparency in terms of a currency value of a mile, and they requested minimum cash cost against redemptions.”
Important to note is that the changes only apply to flights sold and operated by SAA – codeshare flights on Star Alliance partners, as well as flights on partner airlines including SA Express, Mango, Airlink or Swaziland Airlink remain unchanged, with Voyager miles earned according to the distance flown.
“We want to attract new and retain valued customers by recognising their loyalty, and reward them fairly through the earning and spending of miles,” explains Cruse, who says that along with “the gradual widening of the target audience to include low and medium-frequency travellers,” the introduction of revenue-based frequent flyer programmes is one of the major ways in which loyalty offerings worldwide are evolving.
Delta Air Lines made similar changes to its SkyMiles programme as of January this year, with between five and 11 SkyMiles now earned for every US Dollar spent on the fare. The number of miles earned again varies according to the traveller’s SkyMiles status.
“The introduction of a new model for earning miles will increase rewards for those who spend more, as well as differentiate the SkyMiles frequent flyer programme for our premium travellers,” said Jeff Robertson, Delta’s Vice-President – SkyMiles. “The travel industry, including nearly all hotel and credit card programmes, has already moved to a spend-based model. Delta will become the first U.S. global carrier to make this transition to better reward our most loyal customers.”
As part of the changes, Delta says it will offer more redemption options and more award seats. Travellers will also have access to any seat on any Delta flight, with no ‘blackout’ dates. As part of the changes, SkyMiles will also now offer the ability to purchase One-Way Award tickets at half the mileage cost of a round-trip, as well as the ability to combine miles with cash payments.
British Airways has also recently revamped the way in which members of its Executive Club programme earn Avios, with more expensive flexible fares earning considerably more Avios than cut-price fare classes.
From 28 April 2015, when the changes take effect, First Class travellers on British Airways will earn 300% of the miles flown (up from 200%), while Club World travellers on flexible fares will earn 250% (up from 150%). The cheapest Economy fares, however, will see their miles slashed to just 25%, down from the current 100% of miles flown. The minimum Avios earned per fare is also changing, with First Class travellers now earning a minimum of 1,500 Avios (up from 1,000), while the cheapest Economy seats fall to just 125 Avios (from 500).
British Airways has tried to soften the impact of the changes by making an extra 500,000 seats available for travellers to burn their Avios. The airline is guaranteeing that nine million seats will be made available for booking through Avios annually, and that a minimum of four seats in Economy and two in Business will be available for booking with Avios on every flight.
The airline will also introduce peak and off-peak pricing for reward flights.
“Off-peak pricing will be introduced for approximately two-thirds of the year, including many weekends and all Tuesdays and Wednesdays, meaning that seats will be available for a smaller Avios outlay than today,” says Stephen Forbes, spokesperson for British Airways in South Africa, adding that some flights could see the Avios required fall by as much as a third. “For example, an off-peak Economy return from London to New York will cost 26,000 Avios, down from 40,000.”
Reducing the miles earned on cheaper fares is not an entirely new concept though – Air France/KLM’s Flying Blue and Lufthansa’s Miles&More programmes have followed a similar approach for some time, and with an increasing number of global carriers penalising low-revenue fares in favour of high yield passengers, the ‘good old days’ of all seats in the same cabin earning the same number of miles are most certainly on their way out.
Which could, however, be good news for corporate travellers. While there has been no shortage of complaints about these loyalty programme changes, business travellers that typically purchase more expensive last-minute tickets are set to benefit from the potential to earn more miles per trip.
But loyalty programmes aren’t purely about the ability to earn miles and trade them in for free flights. The status and perks that come with climbing the loyalty ladder are often seen as being more valuable than the free flights on offer.
“Travellers want to feel appreciated and want to be rewarded. Therefore, not only do travellers look at price, but also added value,” says Michéll Fourie, Commercial Services South Africa: Manager Sales & Marketing for Air Namibia. “Benefits are one of the key factors for clients making comparisons and decisions when purchasing tickets.”
While individual Gold and Platinum cardholders on Air Namibia’s Reward$ programme receive both ‘Activity’ and ‘Appreciation’ bonus miles, they also enjoy access to the airline’s business lounge as well as additional excess baggage allowances. Platinum cardholders are also exempt from paying change fees on Award Tickets.
Likewise, Elite members on Flying Blue – the loyalty programme for Air France/KLM – are offered Sky Priority benefits that include priority check-in, baggage drop and boarding. Elite tier members also receive an additional baggage allowance, lounge access and priority waitlist – a key benefit for time-pressed corporate travellers.
Delta Air Lines, which counts African carrier Kenya Airways among its 28 partner airlines, offers priority boarding and special check-in privileges to Medallion members, who have access to designated BusinessElite and First Class check-in areas at most airports. Diamond, Platinum and Gold Medallion members may also use the frequent traveller security lines at selected domestic airports in the United States.
Lounge access is one of the most sought-after benefits and most programmes offer upper tier members complimentary access to the hallowed confines of the Business Class lounge. Arik Air, which launched its Affinity Wings programme in late-2014, provides this to all Silver and Gold tier members, but also offers an innovative option that allows all members, regardless of tier status, to use their miles to purchase lounge access.
Qatar Airways also recognises the cachet of lounge access, and issues ‘Single Access’ lounge vouchers to members on Silver status and above, allowing those members to invite fellow travellers to accompany them to the lounge.
It’s yet another way the Doha-based airline is setting its Privilege Club apart from the competition; something that airlines increasingly need to tackle in a saturated marketplace. With many of these ancillary perks cut from the same cloth, airlines are working harder than ever to differentiate their loyalty offering.
With Africa’s booming petro-chemical industry, Flying Blue’s innovative ‘Petroleum Club’ is particularly useful for many corporate travellers to the continent. Aimed at professionals in the oil and gas industries, members enjoy benefits that range from cheaper fares on codeshare carriers to priority check-in and seamless flight transfers.
Similarly, Flying Blue is targeting the corporate traveller with leisure time on his or her hands, with ‘Flying Blue Golf’. In many ways a concierge service for high-income travellers with a penchant for golf, members have access to professional golf booking services and are able to bring golf equipment at no extra charge. Membership is free of charge for all Flying Blue members over 18.
While the ability to trade miles for flights on both the primary airline and alliance partners is the major focus of airline loyalty programmes, frequent flyer programmes are also increasingly spreading their wings to allow for miles to be traded for non-travel benefits.
Emirates Skywards members can shop with miles on the Emirates High Street online store, while Flying Blue has launched an online shop where thousands of brands are offered for sale using both cash and miles. Fellow SkyTeam airline Delta Air Lines likewise offers a SkyMiles Marketplace for members to swap miles for hotel stays, car rental and merchandise.
More interesting though is the SkyMiles Online Auction, which allows members to bid for exclusive bespoke experiences ranging from event tickets to luxury resort visits. For the more philanthropic, members can also donate miles to charity via SkyWish, which supports a range of charities worldwide. In Africa, this includes Habitat for Humanity and UNICEF.
Qatar Airways extends this concept to purchases on terra firma, allowing Privilege Club members to shop and pay with their QMiles at Qatar duty-free outlets and the upmarket Oryx Galleria.
A further trend is the ongoing convergence between credit card providers and airlines, with credit card spend providing a further way for travellers to accrue miles.
Air France/KLM’s partnership with American Express saw it pick up an award at the 2014 Freddie Awards that recognises the best loyalty programmes worldwide, while there’s hardly a major airline worldwide that doesn’t have a credit card loyalty partner.
Etihad Airways, which connects to eight African destinations from its hub in Abu Dhabi, has taken card convergence a step further, introducing a new payment capability on the membership cards for its Etihad Guest loyalty programme.
Dubbed ‘walletplus’, the new payment mechanism is powered by Visa and operates in much the same way as a pre-paid currency card. Travellers load funds in up to 11 different currencies – one of which must be the United Arab Emirates Dirham – onto the card before travelling, and can then withdraw or transact on the road.
“The new Etihad Guest Card with walletplus is innovative in that it combines the functionality of a reloadable payment card with the benefits of Etihad Guest membership in a single piece of plastic, a first in loyalty and travel payments in the Middle East,” says Yasser Al Yousuf, Managing Director of Etihad Guest.
Pre-purchasing currency allows travellers to lock in their exchange rate before departure, as well as manage their spend abroad. Funds are immediately available on arrival, and can be accessed via ATM withdrawal or point of sale purchase. Members also earn one Etihad Guest mile for every $2 spent in the United Arab Emirates, and one Etihad Guest mile per $1 spent abroad when paying with walletplus.
Members of the Etihad Guest programme can also download a walletplus mobile application (iOS and Android only) that allows for balance enquiries and transaction histories. Users can also report a lost card and even transfer funds to other Etihad Guest members with a walletplus account.
Another interesting opportunity in the travel loyalty space comes from Diners Club. The upmarket card offering is partnered with both South African Airways and British Airways, but in August 2014 launched its own loyalty offering, dubbed ‘ClubMiles’.
The structure is similar to most loyalty cards, with miles awarded according to spend, but “rather than partner with specific airlines and accommodation establishments, we link to accredited global organisations that provide access to international airlines and accommodation options,” explains Grace van Deventer, Senior Manager: Value Chain Management Optimisation for Diners Club SA.
Crucially, “ClubMiles is an ‘airline agnostic’ rewards programme, which allows members the freedom to book any available seat with their choice of our airline partners at any time,” adds Van Deventer. “In essence, ClubMiles allows members the flexibility and price benefits normally associated with cash.”
Key for business travellers is that ClubMiles can be accrued on both personal and corporate cards, although earning ratios vary according to the card used. One mile is earned for every R7.50 ($0.60) of eligible spend on a consumer card, and for every R12 ($1) spent by corporate cardholders.
Aside from earning loyalty miles, Diners Club cardholders also have access to over 500 lounges worldwide, can enjoy a free shoeshine at most South African airports, and have access to meet-and-greet services for international arrival and departures. The card company also provides a complimentary concierge service for travel and lifestyle reservations.
Hotels
While airlines are generally seen to be the pioneers and trendsetters in the loyalty space, with a number of aviation groups moving to a system of rewards being determined by actual spend, hotels are, for a change, seemingly ahead of the game.
Protea Hotels’ Prokard programme, for instance, has long had a set ratio of members receiving up to 10% of their nett accommodation spend back in Prokard Rands. The Prokard credit can then be used as partial or full payment on the final hotel bill, including for additional services such as laundry, meals and business services.
The 20 million members of Best Western Rewards® likewise “earn points based on the value of their stay in a hotel,” explains Karl de Lacy, International Development Manager for Best Western International. “Members can use their points for free night stays in Best Western hotels around the world or can exchange them for a Travel Card for values from $25, which can be used in any Best Western hotel towards food and beverage, or accommodation.”
The points earned per spend increase according to your status on the Best Western Rewards® ladder, with Gold Elite members (awarded after 10 nights) earning an additional 10% bonus points per stay.
“After 15 nights the member gains Platinum Elite status and earns the ability to enjoy an upgraded room and an additional 15% bonus points per stay. Our most loyal guests who stay over 30 nights are our Diamond Elite guests. These guests are offered an upgraded room in addition to the bonus points to the value of an additional 30%,” adds De Lacy.
While hotel chains are all but expected to offer a complex loyalty programme, offerings from independent hotels tend to be more pared down. Not so with Preferred Hotel Group’s iPrefer, the world’s first points-based loyalty programme for a global collection of independent hotels.
The program offers its 1.3-million members over 500 properties, with iPrefer members receiving one point for every British Pound, Euro or US Dollar spent on room reservations at participating hotels. Once a minimum threshold of 2,500 points has been reached, they can be cashed in for Reward Certificates that can be used, like cash, to pay for hotel rooms and services.
“Reward Certificates are often used by business travellers for extended stays, for example on weekends, or towards payment for future leisure bookings,” adds Caroline Daniel, Regional Director: Africa for Preferred Hotel Group. “We also allow our travellers to redeem their points at several increments, whether they want to redeem right away at the first level of $50 or wait until they have $500. Also, our Reward Certificates don’t expire and don’t have blackout date restrictions, which means travellers don’t have to rush to use them.”
But why join a hotel loyalty scheme when you already earn points on your affiliated airline loyalty programme? Many travellers don’t realise that hotels offer savvy flyers the ability to ‘double dip’ on loyalty points, accruing points to both the hotel scheme and an affiliated airline’s loyalty programme.
Protea Hotels is a good example. The hotel chain is partnered with British Airways’ Executive Club, and Silver and Gold Prokard members earn both Avios and Prokard Rands on their accommodation spend – one Avios is earned for every R10 ($0.85) spent. However, Bronze Prokard members must choose between earning Avios or Prokard Rands.
Similarly, members of the Hilton HHonors programme earn 10 HHonors Base Points and one mile for each dollar spent on accommodation at a Hilton property, while iPrefer partners with 17 leading airlines including British Airways, Etihad and Air France/KLM.
Mövenpick Hotels and Resorts offers miles to members of Lufthansa, Etihad and Qatar Airways’ loyalty programmes, while Best Western Rewards® is paired with a wide range of carriers with a strong African footprint, including Turkish Airlines, Air France/KLM and Virgin Atlantic.
“We are working with our first African airline and hope to be able to announce this new partnership during 2015,” adds De Lacy.
As of November, Starwood Hotels & Resorts and Emirates are partners, providing reciprocal benefits to Starwood Preferred Guest and Emirates Skywardsmembers. The programme, called Your World Rewards, allows SPG and Skywards elite members who register for the programme to elevate their earnings and benefits when they fly with Emirates or stay with SPG participating hotels.
It’s been a busy few months for Starwood in the loyalty space. November also saw the group
introduce SPG Keyless, a mobile, keyless entry system that allows guests to use their smartphone as a key. Initially, it was rolled out to Aloft, Element and W Hotels around the globe. SPG Keyless – powered by the SPG app – enables guests to bypass the front desk (where available), go directly to their room and unlock their stay with a simple tap of their smartphone.
This news followed barely a month after the debut of SPG Pro, an all-new, comprehensive loyalty programme for meeting and travel professionals. The new programme offers meeting and travel professionals SPG elite status, upgrades and Starpoints for B2B business booked at any of Starwood’s nearly 1,200 properties around the world. Further to that, any SPG member who books a group stay, event or corporate business meeting, regardless of if they are a travel professional or not, earns Starpoints and status for the business they influence.
Earning air miles has rarely been a problem for frequent travellers, but the complexity of redemption and lack of available seats has long been a bugbear for members trying to redeem airline loyalty miles for free flights. Happily, in the hospitality space that rarely seems to be a problem.
“Restrictions on using earned points are a source of endless frustration for customers who eventually give up on trying to claim what’s rightfully theirs. Prokard makes sure that it’s as easy to use your points as it is to earn them,” says Bryer. “There are no complex restrictions and clauses. Irrespective of demand at a hotel, if you have points for a room, you will get a room… Redemption is guaranteed if there is room at the inn.”
“In North America all of our hotels are required to give a minimum number of rooms per day to the programme, which we may roll out on a global basis. Our hotels in Africa also have rooms set aside to accommodate guests who wish to use their points for a stay,” adds De Lacy.
As with airline loyalty offerings, hotel groups are continually looking to sweeten the deal with additional privileges.
“Loyalty programmes have evolved to offer their members more added-value benefits, above and beyond the company’s core offering,” adds Daniel. “In addition to points, members receive VIP service, status, exclusive benefits and amenities such as complimentary internet, early check-in and late check-out privileges, room upgrades on availability and bonus points earning.”
Similarly at Protea Hotels, which has over 10,000 rooms in 116 hotels across seven African countries, Prokard privileges include complimentary early check-in and late check-out, complimentary room upgrades, and discounts on the best available rate.
Members can also receive a discount of up to 20% off their accommodation when travelling in Africa, and Gold Members receive discounts of up to 50% when dining at any Protea Hotel or African Pride Hotel restaurant, even if they are not staying in the hotel.
Mövenpick Hotels and Resorts shies away from the tallying of points in exchange for free room nights, focusing instead on the added-value it can offer guests that show their loyalty simply by becoming repeat customers.
The Swiss-based hotel group has a range of loyalty programmes on offer in different markets, but “we concentrate on real value, such as discounts, room upgrades and late check-out, rather than points,” explains Banks. “We feel the benefits we offer make the customer feel recognised and rewarded, rather than treated as an anonymous membership number with a points balance attached.”
While Best Western Rewards® is all about the points, members still enjoy priority check-in, and Platinum and Diamond Elite members are offered room upgrades where available.
With such an array of benefits from so many different hotel groups, it’s perhaps no surprise that corporate travellers have the most to gain from strategic membership of hotel loyalty programmes.
“Business travellers make up the bulk of the Prokard membership, because they tend to travel more frequently and therefore accrue accommodation-related benefits that much faster,” adds Bryer. “Smaller companies that don’t qualify for corporate rates also find great value in using Prokard for booking meetings, because Prokard members are entitled to book nine rooms per trip and enjoy benefits on all of them if they are also staying.”
Car Hire
While airlines and hotel groups compete feverishly for your loyalty business, the car rental industry is slightly less competitive when it comes to bespoke loyalty programmes. While many of the same travel benefits are offered in this space too, rental agencies typically tend to partner with established airlines and hospitality groups instead of pouring significant resources into creating and marketing their own loyalty offerings.
Of the rental brands operating in Africa, Avis has perhaps the most advanced loyalty programme. Partnering with both South African Airways and British Airways, it also allows clients to both earn and burn miles from dozens of other global airlines.
“To some travellers, loyalty points are important and influence the buying decision,” adds Lance Smith, Executive Sales for Avis Rent-a-Car Southern Africa. “All of our redemption programmes include waivers and limited free mileage. The customer is responsible for other costs.”
There is quite a lot going on at Avis at the moment, with Avis Southern Africa being granted the Budget Car Rental brand for Southern Africa from 1 March. The agreement offers both companies an opportunity to leverage Barloworld’s knowledge of the car rental market to grow and develop the Budget brand across Southern Africa.
Hertz Southern Africa, a Hertz International franchisee, offers an easy-to-use loyalty programme in its Hertz Gold Plus Rewards scheme. Instead of a traditional points-based system, the Rewards programme offers customers one free rental day after every 10 rentals. Membership is structured according to three tiers: Gold, Five Star and President’s Circle, determined by the number of rentals taken during a calendar year. Higher tiers receive increased benefits, including car upgrades and guaranteed availability.
“Loyalty programmes continue to be a key element of most companies’ customer retention and relationship management strategies. They drive revenue and are product differentiators,” says Deborah Arendse, Manager: Hertz Gold Plus Rewards.
However, there is perhaps more to loyalty than a shinier model and an extra day’s rental.
“In my 25 years of experience, there’s no greater loyalty programme than delivering a customer an experience to remember,” says Paulette McGhee, Managing Director of Budget Car and Van Rental Southern Africa. “That’s always been the biggest motivator behind repeat business.
Comment
Alex Kyriakidis
President & Managing Director: Marriott International Middle East & Africa
Loyalty programmes are an ubiquitous feature of the modern economy.
A brief glance inside just about any person’s wallet in a thriving economy will show at least two of them and up to five or six.
But many loyalty programmes weren’t designed for the modern economy, and going forward will become far less of a brand loyalty tool if companies don’t become more forward thinking about their brands and their offerings.
Companies need to be future planning for their next generation of customers, the so-called ‘millennials’ whose perceptions of brands are very different to those of Generation X and the Baby Boomers.
Their perceptions are largely shaped by technology-based knowledge – whether it be seeing a brand on TV or reading about it on social media – as well as interactivity with brands in online spaces and how they and their peer groups respond to that.
The fourth annual Bond Brand Loyalty Study released last year shows that today’s younger consumers have come to expect brands to offer incentive programmes.
The number spikes to 37% when it comes to millennials surveyed for the study, who said they would not be loyal to a brand that doesn’t have a strong loyalty programme.
These millennials, defined in the study as 20-to-34-year-olds, alter their purchase behaviour based on loyalty offerings, too. According to the study, 68% change when and where they make purchases to get loyalty rewards, and 60% will switch brands if incentivised.
That’s both the good news and the bad news for brands.
The good news is that it’s relatively easy to woo these consumers from your competitors. The bad news is that unless you have a loyalty programme that offers them far better incentives, your competitors will snatch them back just as quickly.
Personal data uses deemed “cool” by those surveyed in the Bond study included discounts based on previous purchases, customised offers and invitations to events, and “online communities” related to the loyalty programme.
Tailoring programmes to take these into account are among the pillars that will help any company maintain brand loyalty among millennial consumers.
Among the innovations we’ve rolled out through the Marriott Rewards programme to capture this market segment are Plus Points, which allow members to earn points in real time through social media interactions with Marriott Rewards, and Local Perks, which uses beacon technology to send location-based mobile marketing and offers directly to members when on property.
The bottom line is that millennials as a consumer generation are very different to anything the retail and service world has ever seen before, and they’re not going to wait for brands to catch up to them. Brand offerings have to be tailored to instant gratification to appeal to this market.
They will remain immensely loyal to brands if they believe those brands understand them, share their values, offer them unique experiences, and if those brands will in turn remain loyal to them.
To stay in the game, loyalty programmes going forward will have to reflect all of those things or brands will find that they’ll steadily lose market share.
Industry View: Loyalty programmes up to scratch?
Business Traveller Africa asked Vanya Lessing, Chief Executive Officer of Sure Travel, for her take on loyalty programmes…
Q: How have loyalty programmes evolved over the past 20 years?
A: New platforms have emerged, such as social media, allowing loyalty customers to share their loyalty experiences. Travel still remains the most attractive benefit, with many more options to earn points and benefits. Customers have also been given more lifestyle choices.
Q: Do loyalty programmes offer tangible benefits, or are they just ‘smoke and mirrors’?
A: Loyalty customers? are really savvy. They will expose and abandon a programme if it does not deliver what it promises.
Q: Should companies bother with loyalty programmes, as miles usually accrue to the individual traveller?
A: If a company is doing a lot of travel, collecting loyalty miles or points can result in savings. A well-communicated and managed policy can be implemented.?
Q: What should travellers look out for when deciding which loyalty programme to join?
A: It is important to understand if the programme offers rewards on revenue or on number of nights or tickets. Also understand how the tiers work. Does it have blackout periods for redemption – for example, in peak season? It’s very frustrating belonging to a programme that limits the opportunity to redeem. ?
Q: Apart from earning/spending points, what are the other benefits of joining a loyalty programme?
A: For me, the soft benefits are very important, particularly in travel. Extra baggage, upgrades, complimentary essentials tailored to your likes and lifestyle, club access… all of these make the experience much more enjoyable and save significantly on the travel budget.
Q: Which are some of the most innovative loyalty programmes on the market?
A: Lufthansa/Swiss have no blackout periods and allow customers with a lump sum of 18,000 award miles to pay for taxes and fees. Virgin Atlantic gives Gold members a birthday present of 2,000 miles. Delta and Virgin Atlantic have no expiry date if the account is active.
Asked & Answered
We said: There are never any seats available for award tickets!
Air Namibia answered: “Our clients have a very easy redemption system. Award tickets must be requested five working days before the flight and are valid for 12 months from date of issue. Our redemptions are done on any flight, any day, subject to seat availability. Miles expiry is only after five years.”
We said: I earn so few miles per booking, it’s hardly worth being a member!
Delta Air Lines replied: Delta’s new SkyMiles programme means that there is a new mileage redemption structure that actually improves seat availability at the lowest mileage requirement levels, offers One-Way Awards at half the price of a round-trip, provides additional Miles + Cash Award options, as well as makes significant improvements to delta.com and Delta reservations Award shopping tools.
Earn 30,000 points with Carlson Rezidor
Carlson Rezidor Hotel Group is offering members of its Club Carlson loyalty programme the opportunity to earn up to 30,000 points with its ‘Extend Your Stay, Earn 30K Promotion’. Members can earn 15,000 bonus Gold Points for each two-night eligible stay, or 30,000 bonus Gold Points for each eligible stay of three nights or more, at over 1,000 participating Carlson Rezidor hotels worldwide. The promotion includes the Quorvus Collection, Radisson Blu, Radisson, Park Plaza, Park Inn by Radisson and Country Inns & Suites By Carlson brands, and is valid until 29 March.